Lakeville’s Despatch Industries Changes Hands

Despatch Industries, the privately held Lakeville manufacturer of high-tech ovens, was officially purchased Aug. 8 by Illinois Tool Works, a publicly held industrial manufacturer.

The acquisition was initiated by Despatch, according to Matthew Abbott, the director of global marketing and sales operations for the Lakeville company.

“We went through an exhaustive evaluation on how to grow our business in the future,” Abbott said. “The acquiring lets us take advantage of more business opportunities.”

Despatch’s growth in recent years left little convincing for the acquisition. The Lakeville company, which has annual sales of over $200 million, has enjoyed booming success since 2007 because of rapidly-growing solar-cell manufacturing markets. Despatch now houses over 400 employees, a number which has doubled within the last couple years.

Illinois Tool works has also been successful of late, with 2010 revenue just under $16 billion.

Despatch was started in Minneapolis in 1902 after Albert E. Grapp, the young son of Prussian immigrants and an aspiring inventor, decided to take advantage of the cold Minnesota winters by producing heaters to warm up shivering street-car passengers.

Now, 109 years later, the company is producing some of the most technologically advanced thermal processing solutions in the world, with 80 percent of their business being exported overseas. Despatch also has six international offices in different countries including Germany, South Korea, Taiwan and China.

Their advancement into the world of thermal technology makes them a logical choice for Illinois Tool Works and their attempt to advance in that market place.

“We are excited about this acquisition as the Company’s core thermal technology aligns well with certain of our other existing electronics equipment businesses,” Illinois Tool Works Executive Vice President Steve Martindale said in a statement. “As a leader in thermal processing, Despatch provides us with immediate access to attractive and high growth industries such as solar and carbon fiber as well as the opportunity to extend sales of certain of our existing products into these new markets.”

Already, those at Despatch are excited about the new acquisition. The deal will bring Despatch new business opportunities and more financial backing in the future. Some of these new opportunities will allow the company to dive deeper into the automobile and aviation industries.  

This isn’t the first time Despatch has changed hands. In 2007, the Lakeville company was bought by a partnership led by insurance broker Jim Hays, CEO of Hays Cos., and Patrick Peyton, who is the current CEO of Despatch Industries.

Peyton plans to keep the same management team going into the future. But for now, employees at the Lakeville company are excited to be a part of Illinois Tool Works and ready to experience more growth in an unsettling economy.